<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-Q
---------------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM________________ TO ________________.
COMMISSION FILE NUMBER: 1-11150
---------------
IMAGYN MEDICAL TECHNOLOGIES, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
---------------
DELAWARE 98-0122944
State or other jurisdiction of (I.R.S. Employer
incorporation or organizatiON) Identification No.)
5 CIVIC PLAZA, SUITE 100, NEWPORT BEACH, CALIFORNIA 92660
(Address of principal executive offices)(Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (949) 668-5858
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of Common Stock outstanding as of July 31, 1998 was
36,437,325.
================================================================================
<PAGE> 2
INDEX
PART I -- FINANCIAL INFORMATION
<TABLE>
PAGE
----
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at June 30, 1998 and March 31, 1998........ 3
Condensed Consolidated Statements of Operations for the Three Months
Ended June 30, 1998 and June 30, 1997......................................... 4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 1998 and June 30, 1997............................................... 5
Notes to the Condensed Consolidated Financial Statements......................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations................................................................. 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................................ 11
Item 2. Changes in Securities............................................................ 11
Item 6. Exhibits and Reports on Form 8-K................................................. 11
</TABLE>
<PAGE> 3
IMAGYN MEDICAL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
--------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 384 $ 702
Receivables, net of allowance for doubtful
accounts of $3,675 and $3,359 on June 30, 1998
and March 31, 1998, respectively 35,053 41,828
Inventories, net 30,800 31,989
Prepaid expenses 1,894 2,098
Net assets of discontinued operations 1,655 2,001
--------- ---------
Total current assets 69,786 78,618
Restricted cash 6,811 13,589
Receivables - long term 1,853 2,513
Property and equipment, net 27,027 29,229
Patents and intangibles, net of accumulated
amortization of $5,080 and $4,836 on June 30,
1998 and March 31, 1998, respectively 8,315 8,559
Loans to officers 2,261 2,227
Deposits and other assets 603 694
Deferred debt issuance costs 9,095 9,559
Goodwill, net 57,155 57,798
--------- ---------
$ 182,906 $ 202,786
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable and accrued liabilities $ 37,083 $ 42,325
Compensation and employee benefits 4,512 4,133
Restructuring liabilities 2,326 3,101
Short-term debt 39,298 34,462
Current portion of long-term debt 227 50,253
--------- ---------
Total current liabilities 83,446 134,274
Deferred income 1,000 1,000
Long-term liabilities:
Long-term debt 55,221 5,265
Senior subordinated notes, net 108,376 108,306
Restructuring liabilities, less current portion 1,094 1,120
Other liabilities 2,412 2,744
Stockholders' Deficiency:
Preferred stock, $0.001 par value: Authorized shares - 5,000,000:
Issued and outstanding shares - none -- --
Common stock, $0.001 par value; authorized shares - 100,000,000:
Issued and outstanding shares - 36,357,432 and 36,303,125 at
June 30, 1998 and March 31, 1998, respectively 36 36
Warrants 7,683 7,683
Additional paid-in capital 228,356 228,293
Deficit (304,816) (286,041)
Foreign currency translation adjustment 98 106
--------- ---------
Total common stockholders' deficiency (68,643) (49,923)
--------- ---------
$ 182,906 $ 202,786
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
IMAGYN MEDICAL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
June 30, June 30,
1998 1997
--------- ---------
<S> <C> <C>
Net sales $ 12,772 $ 24,176
Cost of sales 8,440 10,539
-------- --------
Gross profit 4,332 13,637
Operating expenses:
Selling, general and administrative 15,566 19,389
Research and development 1,287 2,764
-------- --------
Total operating expenses 16,853 22,153
-------- --------
Loss from operations (12,521) (8,516)
Other income (expense):
Interest income 200 972
Interest expense (6,756) (5,433)
Other 302 476
-------- --------
Loss from continuing operations before
provision for income taxes (18,775) (12,501)
Provision for income taxes -- 2
-------- --------
Loss from continued operations before discontinued
operations and extraordinary item (18,775) (12,503)
Discontinued operations:
Loss from operations of discontinued business
(net of income taxes) -- 35
-------- --------
Loss before extraordinary item (18,775) (12,538)
Extraordinary item (early extinguishment of debt) -- 1,823
-------- --------
Net loss $(18,775) $(14,361)
======== ========
Net loss per share:
Loss before extraordinary item attributable
to common stockholders $(18,775) $(12,538)
Extraordinary item -- (1,823)
-------- --------
Net loss attributable to common stockholders $(18,775) $(14,361)
======== ========
Basic and diluted loss per share before
discontinued operations and extraordinary item $ (.52) $ (.35)
======== ========
Basic and diluted loss per share before
extraordinary item $ (.52) $ (.35)
======== ========
Basic and diluted loss per share $ (.52) $ (.41)
======== ========
Weighted average number of common shares used
to compute net loss per share 36,331 35,330
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
IMAGYN MEDICAL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
June 30, June 30,
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss from continuing operations before
discontinued operations and extraordinary item $ (18,775) $ (12,503)
Non cash items included in net loss:
Depreciation and amortization 2,445 2,639
Amortization of deferred debt issuance costs 573 414
Gain on sale of fixed assets (74) --
Loss on retirement of assets -- 37
Accrued interest on officer loan (34) --
Provision for doubtful accounts 360 27
Compensation relating to stock option vesting -- 87
Other (8) (87)
Changes in operating assets and liabilities 2,909 (17,713)
--------- ---------
Net cash used in continuing operating activities (12,604) (27,099)
Net cash used in discontinued operations -- (447)
Net cash used in extraordinary item -- --
--------- ---------
Net cash used in operating activities (12,604) (27,546)
Cash flows from investing activities:
Purchase of property and equipment, net (170) (69)
Purchase of technology -- (170)
Proceeds from sale of short and long term investments -- 8,761
Proceeds from sale of property and equipment 888 --
Restricted cash, net 6,778 (19,178)
Purchase of short and long term investments -- (14,748)
Loans and advances to officers -- (1,345)
--------- ---------
Net cash provided (used) in investing activities 7,496 (26,749)
Cash flows from financing activities:
Deferred financing fees paid (39) (5,924)
Proceeds from exercise of stock options and shares
issued under employee stock purchase plan 63 205
Proceeds from short-term debt 4,836 --
Proceeds from long-term debt -- 110,000
Repayment of long-term debt (70) (54,385)
--------- ---------
Net cash provided by financing activities 4,790 49,896
--------- ---------
Net decrease in cash (318) (4,399)
Cash, beginning of period 702 22,574
--------- ---------
Cash, end of period $ 384 $ 18,175
========= =========
Cash paid for interest $ 6,761 $ 5,389
========= =========
Cash paid for taxes $ 16 $ 2
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial tatements.
5
<PAGE> 6
IMAGYN MEDICAL TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
1. INTERIM REPORTING
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
are prepared in accordance with generally accepted accounting principles (GAAP)
and include the accounts of Imagyn Medical Technologies, Inc. ("Imagyn" or the
"Company") and its subsidiaries. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with GAAP have
been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The condensed consolidated financial
statements have been restated to reflect business combinations accounted for
using the pooling of interests method.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to present
fairly the Company's condensed consolidated financial position as of June 30,
1998, its condensed consolidated results of operations for the three month
periods ended June 30, 1998 and June 30, 1997, and its condensed consolidated
cash flows for the three month periods ended June 30, 1998 and June 30, 1997.
Adjustments consist of normal recurring accruals except for the extraordinary
loss on early extinguishment of debt in the accompanying unaudited condensed
consolidated statements of operations. The results of operations for the three
month period ended June 30, 1998 are not necessarily indicative of those to be
expected for the entire year.
These condensed consolidated financial statements should be read in
conjunction with the financial statements included in the Company's Annual
Report on Form 10-K, as amended, for the year ended March 31, 1998, as filed
with the Securities and Exchange Commission.
Significant intercompany accounts and transactions have been eliminated
in consolidation and certain amounts have been reclassified in prior periods to
conform to the current presentation. In interim periods the Company defers and
amortizes over the fiscal year certain administrative costs to more
appropriately reflect the benefits realized during the course of the fiscal
year.
2. NET LOSS PER SHARE
Net loss per share is based on net loss attributable to common
stockholders and the weighted average number of shares of common stock
outstanding during the periods presented. Common stock equivalents and other
potentially dilutive securities have not been included in the calculation as
they are anti-dilutive.
3. COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income," as of the first quarter of
fiscal 1999. SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components, however it has no impact on the
Company's net loss or stockholder's deficiency.
For the three months ended June 30, 1998 and 1997 the Company did not
generate any material components of comprehensive income. Reported net loss
equaled comprehensive net loss for the three months ended June 30, 1998 and
1997.
6
<PAGE> 7
4. INVENTORIES
Inventories are carried at the lower of cost or net realizable value.
Cost is determined on the first-in, first-out basis (in thousands).
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
------- ---------
<S> <C> <C>
Raw materials and supplies $14,164 $14,559
Work in progress 4,350 4,649
Finished goods 12,286 12,781
------- -------
$30,800 $31,989
======= =======
</TABLE>
5. DEBT
On July 10, 1998, the Company's senior lender increased the maximum
amount available under the Company's senior credit facility from $40 million to
$43 million until July 29, 1998. The senior lender has subsequently extended the
increase through August 28, 1998. As a condition to that increase, the senior
lender required that the Company's Chief Executive Officer guarantee $3.0
million of the Company's indebtedness to the Senior Lender.
The Company is currently borrowing in excess of its borrowing
eligibility based on a borrowing base calculation and was granted a waiver by
its lender that permits borrowings in excess of its defined borrowing base. The
waiver is revocable by the senior lender at any time, and the Company is
obligated to pay the senior lender an amount equal to 1% of the credit
commitment under the credit facility for each month during which the amount
outstanding under the senior credit facility exceeds the borrowing base. The
Company is currently in compliance with all other financial covenants under this
facility. The Company had outstanding borrowings of $39.3 million under this
facility as of June 30, 1998.
The Company paid on July 29, 1998, (within the grace period) the
interest payment of approximately $1.1 million that was due on June 30, 1998, to
the holders of the Company's convertible subordinated debentures. The Company
reclassified this debt from current portion of long term debt at March 31, 1998,
to long term at June 30, 1998. Accordingly, management believes that all amounts
due in the next twelve months relating to the convertible subordinated
debentures will be paid on a timely basis.
6. RESTRUCTURING CHARGES
In conjunction with the mergers of Dacomed Corporation, Osbon Medical
Systems, Ltd., Advanced Surgical, Inc., Microsurge, Inc. and Imagyn Medical,
Inc. and the purchases of Richard-Allan Medical, Inc., The Intermed Group, Inc.
and O.R. Concepts the Company implemented restructuring plans to consolidate
redundant administrative and manufacturing facilities and reduce personnel.
The estimated cost associated with each of the above restructuring plans
and the cash and non-cash charges incurred through June 30, 1998 are summarized
in the table below.
<TABLE>
<CAPTION>
BEGINNING BALANCE AT
RESTRUCTURING NON-CASH CASH JUNE 30,
ACCRUAL CHARGES CHARGES 1998
------------- -------- ------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Personnel reduction costs $15,697 $ 1,718 $12,475 $ 1,504
Facility reduction costs 7,172 1,521 3,735 1,916
------- ------- ------- -------
$22,869 $ 3,239 $16,210 $ 3,420
======= ======= ======= =======
</TABLE>
The Company periodically reviews the restructuring reserves and adjusts
them if appropriate. Management believes that restructuring liabilities as of
June 30, 1998 are adequate to complete the actions contemplated by the
restructuring plans.
7
<PAGE> 8
7. INCOME TAXES
The Company did not record an income tax provision or benefit for the
quarter ended June 30, 1998 due to uncertainties as to the ultimate realization
of the Company's deferred tax assets.
8. CONTINGENCIES
The Company is involved from time to time in various claims and legal
actions in the ordinary course of business. No provision for any liability that
may result from the ultimate resolution of such matters has been included in the
accompanying condensed consolidated financial statements.
9. SUPPLEMENTAL CASH FLOW INFORMATION
Changes in operating assets and liabilities (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
June 30, June 30,
1998 1997
------------ ----------
<S> <C> <C>
Receivables $ 7,075 $ (5,382)
Inventories 1,189 (9,709)
Prepaid expenses 204 (942)
Deposits and other assets 91 31
Net assets of discontinued operations 346 412
Accounts payable and accrued liabilities (5,242) (793)
Compensation and employee benefits 379 (118)
Restructuring liabilities (801) (854)
Other liabilities (332) (358)
-------- --------
$ 2,909 $(17,713)
======== ========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997.
Net sales. For the three months ended June 30, 1998, net sales of $12.8
million were $11.4 million or 47.2% lower than sales of $24.2 million for the
corresponding period in 1997. The decrease was attributable to a decline in
sales of the Company's urology and surgical product lines. Urology sales
declined $5.7 million or 58.7% and surgical sales declined $5.9 million or
45.5%. The Company believes that its urology sales continues to be negatively
impacted by the introduction of new oral drug-based treatments for impotence.
Surgical division sales were impacted by the Company's decision to temporarily
reduce its surgical division's production in an effort to improve its cash flow.
This decision resulted in lower sales of its surgical products to distributors,
however the Company believes that in the short-term distributors possess
adequate inventory to continue shipping products to end-use customers. Sales to
international customers represent 26.1% of total sales for the three months
ended June 30, 1998, versus 13.9% for the corresponding period in 1997. The
Company currently anticipates lower quarterly revenues going forward in
comparison to prior year quarters, at least through the third quarter of fiscal
1999.
8
<PAGE> 9
Gross profit. For the three months ended June 30, 1998, gross profit
decreased $9.3 million or 68.2% over the same period in 1997. This decrease was
attributable to both a decrease in sales over the period and a decline in gross
profit margin. The gross profit margin decreased to 33.9% for the three months
ended June 30, 1998 from 56.4% for the three months ended June 30, 1997. The
decrease in gross profit margin was primarily due to a shift in sales from
higher margin urology products to lower margin surgical products and
manufacturing inefficiencies resulting from lower production volumes. Higher
margin urology products accounted for 40.4% of total sales, for the three months
ended June 30, 1997, decreasing to approximately 31.5% of total sales during the
three months ended June 30, 1998. Additionally an increase in international
sales during the three months ended June 30, 1998 adversely impacted gross
profit margin due to lower average product selling prices to international
customers.
Selling, general and administrative. Selling, general and administrative
expenses of $15.6 million for the three months ended June 30, 1998 were $3.8
million or 19.7% lower than selling, general and administrative expenses of
$19.4 million for the corresponding period in 1997. The decrease was attributed
to the consolidation of manufacturing facilities and cost cutting initiatives
undertaken by the Company during January and May of 1998.
Research and development. Research and development costs for the three
months ended June 30, 1998 decreased $1.5 million or 53.4% over the
corresponding period in 1997. The decrease in research and development
expenditures resulted from the substantial completion of the development of the
Company's SiteSelect, EV2 and AeroView products and the slowdown in the
development of other technologies while the Company worked to improve cash flow.
Interest expense. Interest expense for the three months ended June 30,
1998 increased $1.3 million over the corresponding period in 1997. The increase
was primarily due to higher debt levels associated with the Company's bank line
of credit.
Extraordinary expense. During the three months ended June 30, 1997. The
Company recorded an extraordinary loss of $1.8 million related to the write-off
of deferred financing costs related to the retirement of a bank credit facility.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1998, the Company had negative working capital of $13.7
million. The Company's consolidated cash and cash equivalents of $0.7 million at
March 31, 1998 decreased by $0.3 million during the quarter ended June 30, 1998.
Uses of cash totaled $12.8 million during the quarter ended June 30, 1998 and
related primarily to cash used in operating activities ($12.6 million), and cash
used to purchase property, plant and equipment ($0.2 million). The Company's
negative cash flow from operations of $12.6 million for the quarter ended June
30, 1998 was related primarily to operating losses, offset in part by decreases
in accounts receivable and inventory. For the quarter ended June 30, 1998,
sources of cash included approximately $4.8 million from net incremental debt
funding, $0.9 million from the sale of a property and $6.8 million from
restricted cash which was used to pay the interest costs on the Company's Senior
Subordinated Notes. The Company had an interest payment of approximately $1.1
million due on June 30, 1998 to the holders of the Company's Convertible
Subordinated Debentures and used a 30-day grace period in which to make the
interest payment on the Convertible Subordinated Debentures. The quarterly
interest payment was made on July 29, 1998.
Approximately $2.3 million of the Company's $3.4 million of remaining
restructuring liabilities are projected to be paid over the next 12 months. The
Company anticipates capital expenditures, primarily relating to tooling,
fixtures and information systems, to be approximately $3.8 million over the next
nine months.
9
<PAGE> 10
The Company has substantial indebtedness and significant debt service
obligations. At June 30, 1998 the Company had approximately $203.1 million of
outstanding debt. The Company's ability to satisfy its debt obligations will
depend upon its ability to satisfactorily resolve its current liquidity
situation and improve its future operating performance. The Company's success in
dealing with these issues will be affected by prevailing economic conditions and
financial, business and other factors, certain of which are beyond its control,
as well as the availability of borrowings under its existing senior credit
facility or successor credit facilities or funding from the proceeds of asset
sales. The Company will require substantial amounts of cash to fund scheduled
payments of principal and interest on its outstanding indebtedness as well as
future capital expenditures and any increased working capital requirements. The
Company historically has had negative cash flow from operations. In order to
have positive cash flow from operations and meet its various financial
requirements, including debt service, the Company must experience substantial
growth and improvements in its results of operations.
Based on current cash flows, recurring losses from operations, and its
difficulties in generating sufficient cash flow to meet its obligations, the
Company believes that additional funding will likely be necessary to fund its
operations in the short-term. The Company is exploring several alternatives to
deal with the near-term liquidity situation, including obtaining additional
financing, the sale of non-strategic assets and continued consolidation and cost
cutting initiatives.
On July 10, 1998, the Company obtained a commitment for $3 million of
additional short-term financing from its senior lenders, and discussions are
continuing with the bank and others regarding obtaining a larger commitment. The
additional $3 million financing will help address the Company's immediate needs,
however, additional financing will likely be necessary depending upon the timing
of planned asset sales.
The Company is in the process of attempting to sell certain
non-strategic assets, and intends to use the proceeds of those sales to repay
outstanding debt. The Company is in discussions with several interested buyers,
and has received non-binding letters of interest (which contain estimated
purchase prices that are in ranges acceptable to the Company) from prospective
purchasers of three different product lines. Discussions and due diligence
continue with these prospective purchasers and, while no assurances can be
given, the Company expects to complete one or more sales by the end of the
second quarter of fiscal 1999.
Under the terms of the Company's senior credit facility and 12-1/2%
Senior Subordinated Notes, ("Notes") the Company has restrictions on the amount
of additional debt it can currently incur. No assurances can be given that
additional financing will be available to the Company or that, if available,
such financing will be obtainable on terms favorable to the Company. There can
be no assurance that the Company will have positive cash flow from operations in
the future. If the Company is unable to meet its cash requirements out of cash
flow from operations or from available borrowings, there can be no assurance
that it will be able to obtain alternative financing or that it will be
permitted to do so under the terms of the senior credit facility, the indenture
relating to the Notes or other debt instruments. In the absence of such
financing, the Company's ability to respond to changing business and economic
conditions, to make future acquisitions, to absorb adverse operating results or
to fund capital expenditures or research and development may be adversely
affected. Finally, it is anticipated that in order to pay the principal balance
of the Notes due at maturity, the Company will have to obtain alternative
financing.
BUSINESS RISKS
Except for the historical information contained herein, the matters
discussed in this report are forward looking statements that involve risks and
uncertainties. Potential risks and uncertainties include, without limitation,
historical operating losses, ability to raise additional financing, dependence
on new products, ability to manage growth, reliance on patents and proprietary
rights, government regulation and required approvals, competition, and
dependence on management. More information on potential factors which could
affect the Company's financial results are included in the Company's Annual
Report on Form 10-K, as amended, for fiscal 1998 which has been filed with the
Securities and Exchange Commission.
10
<PAGE> 11
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is involved from time to time in various claims and legal
actions arising in the ordinary course of business. No provision for any
liability that may result from the ultimate resolution of any of the matters
described or referred to in this Item 1 have been included in the accompanying
condensed consolidated financial statements. In management's opinion, the
ultimate resolution of claims currently pending will not have a material adverse
effect on the Company's business, results of operations or financial condition.
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on
Form 10-Q to be signed on its behalf by the undersigned, thereunto duly
authorized, this 14th day of August 1998.
Imagyn Medical Technologies, Inc.,
a Delaware corporation
By: /s/ Charles A. Laverty
-------------------------------
Charles A. Laverty
Chief Executive Officer/Chairman
of the Board
By: /s/ Michael A. Montevideo
--------------------------------
Michael A. Montevideo
Senior Vice President and Chief
Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 384
<SECURITIES> 0
<RECEIVABLES> 38,728
<ALLOWANCES> 3,675
<INVENTORY> 30,800
<CURRENT-ASSETS> 69,786
<PP&E> 44,048
<DEPRECIATION> 17,021
<TOTAL-ASSETS> 182,906
<CURRENT-LIABILITIES> 83,446
<BONDS> 0
0
0
<COMMON> 36
<OTHER-SE> (68,643)
<TOTAL-LIABILITY-AND-EQUITY> 182,906
<SALES> 12,772
<TOTAL-REVENUES> 12,772
<CGS> 8,440
<TOTAL-COSTS> 8,440
<OTHER-EXPENSES> 16,853
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,756
<INCOME-PRETAX> 18,775
<INCOME-TAX> 0
<INCOME-CONTINUING> 18,775
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,775
<EPS-PRIMARY> (0.52)
<EPS-DILUTED> (0.52)
</TABLE>
